That's the weakest reading in seven months and it reaffirms the ongoing recession in the construction sector as well in Germany. The decline in new orders accelerated while there was also a marked deterioration in expectations for the coming year. HCOB notes that:
“Against the backdrop of the political crisis, November has been a rough month for the construction sector, with things taking an even steeper dive. Particularly dramatic is the seven-point decline in the index of future activity. Adding to the gloom, material prices went up for the first time since March, which probably didn't help the mood.
The faster drop in new orders signals that the construction sector's recession is not going away anytime soon. It is not surprising that people do not want to take decisions about future construction projects in the current politically uncertain environment. Building activity has slowed particularly sharply in the residential construction sector, and commercial activity has also been hit hard. There is less work in civil engineering, too, though the decline has eased a bit. Subcontractors are feeling the pinch the most, with the index of subcontractor usage hitting its lowest point in over 25 years.
Construction companies have been cutting jobs at the same brisk pace as the previous month. In view of the even sharper decline in construction activity, we expect to see further significant job cuts in the coming months.”
